With CBS breaking the news last week that the USPS is looking to discontinue Saturday delivery, we thought we’d share our views on the move.
First, we won’t argue the merits of the idea. While we are hearing some support and some opposition for the plan, we believe this plan HAS to happen to help address the deficit. In fact, there is an argument to be made that discontinuing Wednesday delivery may not be far behind (we will address this in an upcoming post). The simple truth is that we are moving to a 247-instant-access world, and for every impact there is an electronic solution.
While 7 out of 10 consumers approve of the idea of ending Saturday delivery, we pose the key question. Do they really understand the impact? Here are some of the ways consumers could be affected, suggesting a new harsher meaning for the “check is in the mail”.
Consumer potential pain points caused by a break in the mail service:
- They don’t pay their rent on time. Many consumers like to manage the float and have to understand that the rent has to be recieved by the 5th in many leases. 30% of the country rents vs. owns.
- They don’t pay their credit card bills or utility bills on time.
- According to a 2012 CareerBuilder study, 17% of men and 25% of women missed at least one monthly payment in the past month. We should expect this to rise if people have to track mail delivery more closely.
- They don’t receive their paycheck in the same timely manner
- 5 % of consumers get their paychecks in the mail. If this doesn’t come on Saturday, they might be under financial strain to wait until Monday.
- They don’t get the coupons in a timely manner. If coupons come a couple days later, consumers may have less time to use their paper coupons.
- Finally, on the personal side, more diligence will be required to make sure that birthday cards arrive late. No Saturday delivery will mean consumers need one more day of planning to make sure these cards get there on time.
Most of the pain points are around managing dates and the float between send dates and due dates. More than two-thirds of americans live paycheck to paycheck according to a survey released by the American Payroll Association. The survey of 30,600 people found that 68 percent said it would be somewhat difficult or very difficult if their paychecks were delayed for a week.
What likely actions will they will take when such pain points increase? Simple. They will move most of the above activities to electronic methods.
- More signups for direct deposit
- More use of P2P services like Paypal, Dwolla and ClearXchange to pay their rent
- More use of auto-pay services from biller direct sites
- More online shopping with online promo codes
- Mail consolidation and reminder services like Digital Postal Mail
- Moving more personal notes to PaperlessPost and/or gift payment alternatives like Amazon giftcards or e-certificates.
The end-of-Saturday move will affect the a business’ ability to continue certain aspects that are vital to their operation in a timely manner.
- For the businesses that receive payments by checks, the end to Saturday mail service can have a significant impact on their operations. The one-day delay in processing a payment could trigger a series of delays that impact operations.
- A 2012 analysis of the impact of ending next day delivery could cost a U.S. company with $10 billion in revenues up to $100 million in working capital as a result of its impact on accounts receivable, according to Veronica Heald, a practice leader at REL Consulting. We should expect the end of Saturday delivery to have a lesser impact, but still very material.
- Businesses that depend on coupons and special offers to drive business will have to reprogram their mailing schedules. They now have to ensure timely delivery of their coupons to attract weekend shoppers to their businesses.
- The DMNews reports that “one thing direct marketers might want to budget for is additional tracking, Direct response marketers will have to keep track of this to adjust staffing at call centers”
- In a CrowdShifter post. Lisa Formica, president of FMI, a direct mail marketing and advertising firm, said this. “The impact from this decision will vary by marketer and their direct mail strategy. If they are trying to time mail delivery in conjunction with a specific offer, then some alterations to their schedules will have to be made.” She gave the example of a retail marketer who tries to time delivery of their piece to their audience on the Friday before a weekend sale. ”Typically a marketer can get the timing down to a 3-day window where the early arrivals are delivered on Thursday, another large section delivered on Friday and then the back end delivered on Saturday,” she says. “In this scenario, those Saturday deliveries will be Monday deliveries and thus irrelevant because the sale will be over. ”
- Many magazine publishers target Saturday for delivery to maximize their readership.
- Magazines like The Week are forced to either keep their news cycle as is and deliver on Monday, or cut back their news cycle to ensure a Friday delivery. In this case, they prefer the later as weekend viewership is so important.
- Businesses that process documents and rely on use the USPS to send and receive time sensitive documents will be forced to use more expensive courier services for Saturday deliveries.
My mail this past Saturday
While businesses continue to depend on the USPS for important document delivery, payments and marketing, there are a many services currently available that can reduce a business’ dependency on the USPS.
- As more businesses and service providers make the transition to digital postal mail for the digital delivery of billing statements to consumers’ digital postal mailboxes, they will have a channel that offers 24/7 delivery and receipt of statements and payments.
- The use of QR codes and location based mobile marketing will allow business to promote custom offers to their targeted audiences efficiently and effectively.
- Online storage solutions like DropBox, Box and Skydrive allow business to store and share sensitive documents in a secure environment.
- E-signature sites like HelloSign, DocuSign, EchoSign, and RightSigniture are paving the path to e-signing contracts to remove the need for postal or fax copies of legal documents.
- Magazine publishers will work harder to migrate users to digital versions of their magazines.
- Direct mailers will have to look at digital solutions to make sure they maximize the timing of there sales.
Consider this. What if a national cable provider could only provide programming for 5 days a week starting in August. Would consumers suffer? Perhaps, but many would simply migrate to Netflix or Hulu’s 247 streaming. Similarly, some of the content providers would shift their content from cable to streaming. Sometimes, there are no alternatives when there is a lapse in service – like the Superbowl’s power outage — but more often, there is a technology solution waiting in the wings.